A steep dip in the financial results of all operators and mobile phone makers, is just the tip of the iceberg.
What you don’t see is what will hurt you or save you. The vast problems facing the mobile world lie unseen under the surface playing the role of the Titanic. The iceberg that is.
The first time since the birth of the cellular mobile communications industry in the early 1980s, that the number of new phones to be shipped this year, and the number of subscriptions, are expected to seriously fall. By most estimates, including the market leader, Nokia, the mobile phone sales and subs would drop by at least 10 per cent this year and maybe up to 25%. This is a serious threat, and although the mobile telecommunications industry is more resilient than banking, the automobile or the heavy industry, this recession has already claimed its first victims, including Nortel, the Canadian telecoms equipment maker that filed for chapter 11 bankruptcy protection from its creditors last month and many more. More casualties are likely to follow in an industry which, unlike others, must grapple with rapid technology change, growing complexity and ever increasing customer expectations. These challenges are even more acute in the fast-paced evolution of mobile devices themselves and particularly the recent rapid growth of the smartphone market.
Yet I believe that the future of mobile handsets, will evolve on the extreme ends of the innovation arena. The one end will bring more processing power, memory, graphics, connectivity options, higher definition screens and great expense. The other end wil bring dirt cheap chipsets and screens suitable to be giveaways at no cost to the network operator. Much like the disposable lighters these phones will become the ubiquitous mobile phones. They will drive the bottom of the pyramid market but also they will eventually come out to dominate the top end as well. I rely and actively use across the developed and developing more my disposable phones and my disposable SIMs than the N95 or the I-phone which both prove temperamental and expensive to use. Forget the Blackberry as I weaned myself off the Crackberry long ago never to be hooked again…
Yet it is still the focus of this smart industry….the smart phones that the Nokia and Sony Erickson and others want to produce are vastly complex and underutilized miracles of engineering that are too dear to command a large interest in the marketplace and will be relegated to the very low digits of the market. The Nokias and others like it, will accomplish the share of the mobile phone market that Apple has in the computer market. Some of their snazzy mobile devices will manage connections of 100 megabits per second and upwards, seamless roaming with contextual information to be based on location as well as how the user feels, sensor applications, and maybe even brew you a cappuccino, this inovation will be limited to the very few able or wiling to shell out the big bucs for something as fickle and easily lost as the mobile.
The really radical innovation is the cost of the new mobile chipsets that has dropped below $2 for the serious and expensive phones and bellow 1 cent for the el cheapos.
That is where the trully game changing inovation and most amazing radical progress in this space will come from. Here are the cheap mobile phones made in India that will be delivered to consumers this year and will be costing in total under two dollars per unit delivered to the user. Now that is game changing innovation that will be putting the manufacturers at risk of irrelevancy with their really expensive smartphones. I’ve already seen the one dollar mobile telephones in India and they leave much to be desired but like your first set of trainers they work well.
For the bottom of the pyramid people we’ll be happy to deliver them these trainers to be the first lifeline to the telecomunications world. The Bphone revolution isn’t going to happen with smartphones but rather with inexpensive dollar phones.
The Billion People Phone manages to ascertain the need to reach the people and to give them their basic trainer phones. Unlike the commercial operators there is no need to extract their last penny but to teach them how to be anglers in their own lives with our connection capacity.
The Indian makers and assemblers of the one or two dollar mobile phones work with the ease and knowledge of piece workers but are independent makers fuelling a new revolutio as Ghandi fueled the textile revolution with his hand loom that caused the collapse of the textile mills in Yorkshire and Manchester…
A word of forewarning to the Swedish and Finnish industrial concerns and their international brethren. The Indian mobile revolution is in full swing and Ghandiji teaches them how to use the hand loom…
These single employee assembly phone makers of India resemble the single master watchmakers of Mumbai of the past. They are craftsmen who are also techie enought be able to put together about 25 of these phones per day. You make the math and see that they are top earners in their community even by producing the dollar or two dollar phones out of shelf parts acquired in tremendous bulk.
These are beautiful craftsmen without clean rooms or assembly lines but with real sight of the market place open infront of them and literally infront of their doors.
The value of the revolution is magnified when the Vietnamese and Cambodians catch on to the game but the Indians are firmly in control of the mobile revolution.
These craftsmen are beautiful…
And what a difference they make with their Swedish or Taiwanese or even the very industrious Chinese counterparts assembled in ndustrial concerns. The so called disposable phones of the future are the Indian ones and is here where most of the GSM revolution is taking place.
The manufacturers and the mobile operators though remain unaware of the Indian mobile superiority. In both hardware and software.
For mobile operators and device manufacturers, the business case for the integration of wireless technology into a range of devices, not just voice-centred mobile phones, may now be stronger, and the mobile phone industry should consider which devices could benefit from having multiple wireless standards built in, but the cheapness of new devises is what will drive the thousand of new manufacturers in India to blossom. As I go for my walk across India I will be visiting many such shops that will hopefully grow up to become the Sony Ericksons and the Nokias and Motorollas of tomorrow.
Te other big beasts that shold be concerned are the Mobile operators whose survival hinges on the need to change. Theyneed to change and also decide whether they should remain focused on the provision of long-range cellular mobile standards, or if they should become aggregators of multiple wireless standards. Some network operators are already responding to these changes. Mobile phones won’t be the only devices that consumers and businesses use with the wireless network in the future . Just look at the netbooks and e-readers that are already available such as Amazon’s Kindle e-book reader which comes with a built-in cellular modem but no monthly cellular contract. The Kndle owners use pay-as-you-go for the use of Sprint Nextel’s network when they download an e-book. Network operators also face a challenge or an opportunity, with the emergence of online software markets such as the Apple iPhone App Store or Google’s Android Marketplace, which enable smartphone owners to download application software, mostly free, directly to their phones. The success of the “app store” has undoubtbly shifted the focus from hardware to software and tilted the balance of power away from carrier to consumers, who are now able to customise the way their handsets operate. Operators have long been concerned about the threat from third parties to the originally closed relationship between operator and customer. I believe the walled garden model is officially dead in 2009. The mobile phone users are expected to download more than 10bn applications to their mobile phones but the vast majority are to be free and from web sites and companies we haven’t heard from or at least the Apps will be managed by mobile device manufacturers, consumer electronics firms and software houses.
The operators are unlikely to earn any direct revenue from third-party application downloads.
Finally the mobile data and the “mobile internet” it enables, is taking off both on the expensive rich handsets as well as on the poor people’s phones.
Global sales of mobile broadband ‘dongles’ exceeded 4m a month during 2008 and are expected to double in 2009, in dismall climate for the industry. The data now are exceeding the voice volume on western mobile networks, and their costs rapidly erode margins.
WiMax looks to be very popular in developing countries and other advanced deployments. In the next year, we expect mobile operators to use rich communication suite (RCS) technology to launch multimode messaging and provide location information from within the contact list of the phone.
But I believe the real market opportunities for the western operators will be born out of technology that delivers high bandwidth and mobility for reliable any time, anywhere access to multimedia content and services. We will see voice over the internet (VoIP), video messaging, streaming, cross-operator presence and other new and innovative services.
Yet rather than technology, I argue that pricing and usability are now the key issues that need to be addressed and will be the future drivers of the industry’s growth or even survival.
The main barrier for more data growth is carriers’ inflexible pricing plans and the outmoded view of most of the carriers who still treat data as a business offering. Let me tell you it is a simple consumer offering now and you must let your plans eflect that. Unfortunately today’s plans are either ‘all you can eat’ or no access at all, with nothing offered in between. only the really small and inovative operators have pay as you go models. They understand what consumers want now, which is more cost control and real time money management of their budgets.
But the real interest is with the disposable phones and the disposable pricing plans for the everyday consumer. Both in the East and the West. Both in the developed and the developing world. Both in the North and in the South.
THIS WILL DRIVE more people to the mobile world and more usage to the existing and future networks.
